In Brief
A registered dealer in red arecanut had goods detained during transit with discrepancies in quantity. After issuing a show-cause notice, the authorities accepted payment of Rs. 7,20,440 and released the goods but refused to pass a final reasoned order, claiming proceedings concluded under Section 129(5) of the CGST Act. The High Court upheld this refusal. The Supreme Court allowed the appeal, holding that a Proper Officer must always pass a formal reasoned order under Section 129(3), regardless of payment. The Court clarified that the "deeming fiction" in Section 129(5) does not override the duty to adjudicate, especially when objections are filed or payment is made under commercial compulsion. A reasoned order is essential to safeguard the taxpayer's statutory right to appeal and ensure compliance with Article 265 of the Constitution.
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